Galaxy Agrico Exports Ltd Management Discussions

<dhhead>MANAGEMENT DISCUSSION AND ANALYSIS REPORT </dhhead>

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

Industry Overview

During the Financial Year 2025-26, the agricultural machinery and engineering products industry continued to demonstrate resilience and sustained growth, supported by favourable government policies, increasing farm mechanization, technological advancements, and expanding export opportunities. The sector remained an integral contributor to Indias manufacturing and agricultural ecosystem, driven by the need to improve productivity, operational efficiency, and sustainable farming practices.

The Indian agricultural machinery market witnessed steady growth as farmers increasingly adopted modern and technologically advanced equipment to address labour shortages, optimize operational costs, and enhance crop productivity. The growing awareness of precision farming, coupled with the adoption of smart agricultural technologies such as GPS-enabled machinery, sensor-based equipment, drone-assisted crop management, and IoT-enabled farm implements, continued to transform the agricultural landscape. These technological developments have created significant opportunities for manufacturers of agricultural implements, components, and engineering products.

Government initiatives continued to play a pivotal role in promoting mechanization across the country. Schemes such as the Sub-Mission on Agricultural Mechanization (SMAM), PM-KUSUM, and various State Government subsidy programmes encouraged the adoption of modern agricultural equipment, particularly among small and marginal farmers. Increased allocation towards rural infrastructure, irrigation projects, farm mechanization, and agricultural development further strengthened the demand for reliable and cost-effective agricultural machinery and components.

The engineering sector also maintained a positive growth trajectory during the year, supported by strong domestic demand and improved export performance. Indias engineering goods exports continued to benefit from the diversification of global supply chains, increasing preference for high-quality manufacturing from India, and enhanced competitiveness of Indian engineering companies. Demand for forged, cast, machined, and fabricated engineering components remained robust across key international markets, including North America, Europe, the Middle East, Africa, and select Asian countries.

The Governments continued emphasis on the "Make in India", "Atmanirbhar Bharat", Production Linked Incentive (PLI) initiatives, and infrastructure development has further strengthened the manufacturing ecosystem. These initiatives have encouraged capacity expansion, technological modernization, quality enhancement, and greater participation of Indian manufacturers in global value chains.

At the same time, the industry continued to face certain challenges, including volatility in raw material prices, fluctuations in freight and logistics costs, geopolitical uncertainties, changing global trade dynamics, and inflationary pressures. Nevertheless, the sector demonstrated resilience through improved operational efficiencies, better supply chain management, and increasing focus on product innovation and value-added manufacturing.

With its diversified product portfolio, established manufacturing capabilities, strong quality standards, and growing presence in domestic as well as international markets, the Company remains well-positioned to capitalize on the long-term opportunities emerging from increasing agricultural mechanization, rising infrastructure investments, expanding engineering exports, and the continued shift towards advanced manufacturing technologies.

2. OPPORTUNITIES AND THREATS

Opportunities:

Expansion into organic and inorganic chemicals opens doors to new markets and product segments. A streamlined and asset-light structure post-slump sale may allow increased operational flexibility. Rising global demand for specialty chemicals and agrochemicals could provide synergy with new object clauses.

Threats:

Threats:- Volatility in global and domestic economic conditions may impact business sentiment.- Rising raw material and logistics costs can pressurize margins.- The transition from core business activity to a new sector involves inherent execution and market-entry risks.

3. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

Currently, the Company operates in a single segment. However, given the recent object clause amendment, it is expected that product and segment diversification may take place in upcoming years. The detailed segment-wise performance has been given separately in the note on "Segment Reporting" forming part of financial statements.

4. OUTLOOK

Galaxy Agrico Exports Limited is in the process of realigning its business strategy with its expanded scope into chemicals and allied sectors, the Company is evaluating suitable business opportunities. Management is optimistic that this diversification will yield long-term value for stakeholders. This change opens avenues in specialty and industrial chemicals, tapping into new customer bases and market opportunities.

5. RISKS AND CONCERNS

The Company has implemented a Risk Management Policy to identify and mitigate potential risks. Key concerns include:

Sectoral risks related to entry into the chemical domain.

Dependence on economic cycles, particularly for industrial and agrochemical applications.

Compliance and environmental regulations applicable to chemical-related businesses.

The major risk factors affecting the company are overcapacity in industry, cash constraints at customers end leading to inventory pile up, increasing receivable position and volatility in currency and raw material prices.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate internal control systems commensurate with the size and nature of its operations. The internal audit function, reporting to the Audit Committee, ensures operational efficiency, safeguarding of assets, and regulatory compliance. Periodic reviews and corrective actions are undertaken based on internal audit findings.

7. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Particulars	FY 2025-26 (? in Lakhs)	FY 2024-25 (? in Lakhs)
Revenue from Operations	262.03	359.04
Other Income	23.64	24.54
Total Revenue	285.67	383.58
Total Expenditure	394.18	379.35
Profit / (Loss) Before Tax	(108.51)	4.23
Net Profit / (Loss) After Tax	381.42	12.07
EPS (Basic & Diluted)	10.29	0.30

During the Financial Year 2025-26, the Company reported Revenue from Operations of 262.03 Lakhs, as against 359.04 Lakhs in the previous financial year. Consequently, the Companys Total Revenue stood at 285.67 Lakhs, compared to 383.58 Lakhs in FY 2024-25. Other Income for the year amounted to 23.64 Lakhs, as against 24.54 Lakhs in the previous year.

Total Expenditure during the year increased to 394.18 Lakhs from 379.35 Lakhs in the previous financial year, primarily on account of operational expenses and costs associated with business activities.

The Company reported a Loss Before Tax of 108.51 Lakhs during FY 2025-26, compared with a Profit Before Tax of 4.23 Lakhs in FY 2024-25. However, the Net Profit After Tax stood at 381.42 Lakhs, significantly higher than 12.07 Lakhs reported in the previous year. The substantial increase in Profit After Tax was primarily attributable to the recognition of exceptional and/or deferred tax-related benefits and other non-operating accounting adjustments during the year. Accordingly, the Basic and Diluted Earnings Per Share (EPS) improved to 10.29 from 0.30 in FY 2024-25.

The management continues to focus on improving operational efficiencies, strengthening revenue generation, optimizing costs, and expanding the Companys business operations with an objective of achieving sustainable and profitable growth in the coming years.

8. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT

The Company recognizes human resources as its core asset. During the year, the overall employee relations remained cordial. The management acknowledges the contribution of its employees and continues to focus on talent retention and organizational growth.

9. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

The Company has not provided specific ratio analysis in the financials. However, due to losses incurred during the year and sale of its major assets, there has been an adverse impact on profitability and return ratios.

10. CAUTIONARY STATEMENT

Statements in this Report describing the Companys objectives, projections, estimates, and expectations may be "forward-looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied. Important factors that could influence the Companys operations include economic developments, changes in regulatory environment, and other incidental factors.

For and on Behalf of the Board,
GALAXY AGRICO EXPORTS LIMITED

Sd/-
PRASHANT SUDHIR KHAIRNAR
Director (DIN: 11434708)